No property tax hike, but increases for sewer rates

It was a night of ups and downs for Bethlehem City Council Tuesday, as it honored outgoing Mayor John Callahan and was threatened with a lawsuit by outgoing City Controller Robert Pfenning.

Council also adopted 10 different budgets for 2014, with no property tax increase but an immediate increase of about 15 percent in sewer rates and an eventual increase in water rates that also could be as high as 15 percent.

The proposed water rate increase must be approved by the Pennsylvania Public Utility Commission, which has the authority to reduce it.

“Usually that results in a reduced number,” said council president Eric Evans after the meeting.

Evans said Bethlehem’s increased water and sewer rates “will put us right about in the middle of all the regional distributors” including private, non-profit and municipal suppliers. He said Bethlehem’s rates currently are at the low end of prices charged by those distributors.

“It’s still a fair rate,” said the council president. He said the increases are needed to pay for eroding infrastructure in the water and sewer systems.

In addition to the $71 millon general fund budget, council also voted on each of the following budgets: water fund, sewer fund, golf course enterprise fund, liquid fuels fund, community development, 911 fund and capital budgets for non-utilities, water utilities and sewer utilities.

It also voted to "set the tax rate for all city purposes."

Most, but not all, of those votes were unanimous by the six council members at the meeting.

With no explanation during the meeting, council member David DiGiacinto voted no on the general fund budget, setting the 2014 tax rate and a golf enterprise fund budget.

After the meeting, he said some projected revenues in the general fund budget are “a little bit high. They are higher than what I believe is achievable, based on current performance this year, which is going to make it difficult for us at the end of next year.”

DiGiacinto said those high revenue projections are part of the reason why a .75-mill tax imposed three years ago was not reduced or eliminated in 2014, although that tax was only supposed to be temporary

“They knew it was going to be needed.”

He said when that tax was established, it was supposed to fill a specific need – help pay for capital expenditures to improve public safety.

“That has been fulfilled. It has done what it was supposed to do. When council established that tax, the hope was that we would be able to take it out at some point.”

DiGiacinto said that’s why he voted no on the 2014 tax rate. He was hoping all or some of that .75-mill tax would have been removed for next year.

He said he voted no on the golf enterprise fund because those projected revenues also are high based on prior performance.

Staff pay debate

As part of the 2014 budget discussion, a few council members debated whether increases and decreases should be made in salaries of some city staffers -- and when those changes should be made.

Mayor-elect Robert Donchez, who now is a member of council, seemed to end the debate when he said he will present his appointees and their proposed salaries to council before he is sworn in on Jan. 6.

Donchez promised salary reductions will be recommended “for a good number” of department heads – but not all of them

The mayor-elect stressed all those positions and their salaries will be reviewed.

Council member Karen Dolan said council had a responsibility set the salaries now, as part of the 2014 budget.

After the meeting, Evans indicated council can make changes to the budget for up to 30 days after it has been approved.

Only one resident speaks

Only one of the city’s more than 75,000 residents addressed any budget issues before council adopted the budgets.